Empire State Realty Trust enters its Q2 earnings release today with the short-covering trend from the previous article intact — and the stock up another 2.5% on the day to $5.80, adding to a 6.8% weekly gain.
The short-interest retreat has continued without reversal. Bears have now pulled back roughly 21% over the past month, with short interest at 5.1% of the free float — down from approximately 10.9 million shares in early July to just over 8.6 million. The pace has held: another 6.5% fell away over the past week alone. The lending market offers no friction to new shorts who might want to step back in — availability is running above 717%, meaning more than seven shares are available to borrow for every one currently lent out, comfortably above the 52-week floor of 286%. Cost to borrow, at 0.58%, ticked up 17% on the week but remains firmly low-cost territory. The short score has also drifted down from 49.1 on July 23 to 46.9 today, consistent with the broader easing of bearish positioning.
Options positioning reinforces the bullish lean. The put/call ratio is running near its lowest levels of the past year at 0.033 — slightly below its 20-day average — compared to a 52-week high of 2.39. That extreme skew toward calls reflects little appetite for downside protection, which aligns with the short-covering narrative but also means the options market is not pricing in meaningful event risk around the print.
The analyst picture tells a more cautious story. The most recent actions — Wells Fargo trimming its target to $6.00 and Citigroup cutting to $5.75 back in late May and April respectively — left the consensus mean at $6.35, a modest premium to the current price. Both maintained negative-to-neutral ratings. EPS momentum factor scores rank in the bottom 15th percentile on 30- and 90-day windows, and forward earnings growth is deeply negative. The bull case rests on the stock's low price-to-book (0.49) and the possibility that New York office fundamentals are quietly stabilising around ESRT's iconic flagship asset. Bears point to thin returns on capital and a steady downward drift in analyst targets through 2026.
Office REIT peers have moved in mixed directions this week: BXP added 2.4% and VNO was broadly flat, while BDN slid nearly 5% — underscoring that the subsector recovery remains uneven. Today's Q2 print will test whether ESRT's leasing volumes and occupancy trends at the Empire State Building justify the month-long short unwind, or whether covering was simply the path of least resistance ahead of an uncertain result.
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